ANZ has confirmed today that it will sell its life insurance business to Zurich Financial Services Australia. The bank said the transaction was another step in its strategy to create a simpler bank, focused on retail and business banking in Australia and New Zealand, with its institutional banking business "supporting client trade and capital flows across the region".The sale of ANZ's life insurance business will be comprised of two transactions with total proceeds of A$2.85 billion, inclusive of $1 billion of upfront reinsurance commission from Zurich.The life insurance business had a carrying value of $3.38 billion, meaning the Group will wear an estimated accounting loss on sale of around $520 million post-separation and estimated post-tax transaction costs of $75 million - a cost ANZ said it was willing to wear for longer term strategic benefits."This transaction will complete the simplification of ANZ's Australian wealth business, however we will continue to work hard to minimise any disruption to our customers during the transition," ANZ Group Executive Wealth Australia Alexis George said.ANZ said the transaction "would be broadly [earnings per share] and [return on equity] neutral if capital released is returned to shareholders".This deal follows the sale of its OnePath pensions and investments and aligned dealer groups business to IOOF Holdings Limited in October for $975 million. Following completion of the sale, Zurich will be Australia's largest retail life insurer as measured by in-force premiums with more than 1.5 million customers, while IOOF will have a top-five superannuation platform with the second largest aligned financial advice network. The annual profit of ANZ's life insurance business is $189 million on a 2017 pro forma cash net profit after-tax basis.ANZ confirmed to the ASX that the total proceeds from these steps in the simplification of its Wealth Australia division would be $3.83 billion. Capital released following reinsurance and completion of the life insurance sale is expected to increase ANZ's consolidated CET1 capital ratio by approximately 65 basis points and largely be surplus to ANZ's "unquestionably strong" APRA requirements. (And if the sale of the OnePath business is added in, the total CET1 improvement increases to around 80 basis points.)As part of the agreement, ANZ and Zurich will enter into a 20-year strategic alliance to offer life insurance solutions through ANZ's distribution channels.There are no changes to any current insurance policies as a result of today's announcement, including general insurance products provided via QBE.The transaction does not include ANZ's New Zealand insurance operations and the Group will retain its lenders mortgage insurance, general insurance distribution and financial planning businesses.ANZ expects completion to occur in late 2018 together with the recently announced sale to IOOF of the Group's pensions & investments and aligned dealer group businesses. The transaction, including the reinsurance, remains subject to regulatory approval.